I read an article recently titled “The Tragedy is Complete” and it offered a brief recap of the market in 2020. The primary message is one we have often shared with our clients and bears worth repeating. It goes like this:
- On Feb 19, the S&P 500 Index made a new all-time high of 3,386
- As of the writing of this piece on Sept 2, it stood at 3,540
- The spread of the novel coronavirus caused a huge drop in GDP and a catastrophic rise in unemployment and an economic shut down in the US and globally.
- Then the equity market went down further and faster than it had since the Great Depression.
- On March 23, the Fed announced the unprecedented step of adding more liquidity to the credit facilities than before. The equity markets took an abrupt about-face turn and ran back up to the previous levels in record time.
- In the 5-weeks between Feb 19 and March 23, the net liquidations of equity mutual funds and ETFs were staggering.
- For a brief period, the market drop felt as painful as the previous one in the 2007-2009 bear market = minus 57%!
- Where we stand now: a) the market cannot be timed, b) declines like this are both unpredictable and very, very common, c) the decline always ends with a surprising resurgence, and d) optimism and faith in the future always wins.
In this animation you will be taken back to popular websites over the past 27-years. Some are obvious, some have been forgotten, some have shrunk, and some have grown way beyond what anyone could have imagined back in the early 1990s.
If you are any kind of baseball history buff, you will most assuredly enjoy this story about an old Dodger in the 1960s. Remember, that is when pitchers routinely went for 9 innings!
FourThoughts – Jim Butler, CFP®, AIF®
Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results.